Key Takeaways From the Fed’s Latest Decision to Hold Rates Steady as it Warns of Stagflation

by Bryan Mena, CNN
AOL

The Federal Reserve said Wednesday it will hold interest rates steady as the US economy begins to show the effects of President Donald Trump’s haphazard trade war.

The central bank kept its benchmark lending rate unchanged at a range of 4.25% to 4.5%, extending a holding pattern that began in January.

Officials have said it’s best to wait on the sidelines for data to show how the US economy is responding to Trump’s significant policy changes, though the Fed said in its latest policy statement that the “risks of higher unemployment and higher inflation have risen” — a toxic duo known as stagflation.

Fed Chair Jerome Powell in a news conference said that uncertainty is pervasive, from where policy is headed to how the economy will evolve in the face of Trump’s ongoing trade spat with the world. He also reiterated the growing threat of stagflation, but said America’s labor market remains a reassuring bright spot in the economy.

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